Cotton Falls from One-Week High

Cotton prices fell below 81 cents per pound after reaching a one-week high on July 23rd, as easing weather concerns dampened expectations of tighter supplies. In India, a revival in monsoon rains accelerated cotton planting, after the having arrived three days late. Following its fifth driest June on record, the country's rainfall deficit narrowed to 16% from nearly 40% at the end of June, as widespread rains in recent weeks helped provide rain-fed irrigation to farmland's, easing fears of a supply shortfall. Meanwhile, lower oil prices weighed on demand, reducing cotton's competitiveness against polyester fibers. However, India's cotton-sown area was still down 4% year-on-year at 9.87 million hectares, reflecting slower planting across several major producing states. In Brazil, growers are expected to reduce cotton planted area by 4% in the 2025/26 season despite record exports in 2024/25, as weaker prices discouraged acreage expansion.

Cotton prices hovered around 80 cents per pound, rebounding toward a one-week high as weather-driven supply concerns outweighed robust Brazilian production outlook. In India, weather remained in focus, with the monsoon bringing the country's fifth-driest June on record and rainfall running nearly 40% below normal. As much of India's farmland still relies on rain-fed irrigation, prolonged dry spells interspersed with intense downpours raised concerns over disrupted summer crop sowing. Meanwhile, as domestic prices approach the minimum support price, increased government procurement reduce available cotton for private buyers, lifting prices. Still, higher crude oil prices improved cotton's competitiveness against synthetic fibres by raising polyester production costs, while expectations of ample global supply persisted as Brazil reported record cotton exports in the 2024/25 season and projected output to increase by a further 13% in 2025/26, limiting further gains in cotton prices.

Cotton futures hovered around 78 cents per pound, after reaching the highest level in two months at 81.5 cents, as increasing oil prices due to geopolitical tensions and adverse weather supported prices. US-Iran tensions persisted, while uncertainty remained over shipping through the Strait of Hormuz. President Donald Trump stated that the waterway remained open to commercial vessels, while Tehran claimed it had closed the strait, increasing oil prices and boosting cotton. Meanwhile, concerns over weather-related supply risks continued to support prices. India's monsoon is expected to bring below-average rainfall, potentially delaying cotton sowing, which was already running 23% below last year's pace. However, gains were capped by booming Brazilian cotton exports to Asian markets and the latest World Agricultural Supply and Demand Estimates, which projected larger cotton crops in Brazil and the United States alongside only a modest increase in global consumption.